4 Exceptional Dividend Growers Hiding in Plain Sight

dividend-growerPaying attention goes a long way to improving your chance of success – investing is no different.
This obvious notion was driven home to me in college.  One day a finance professor, delving into the particulars of regression analysis, stopped, turned to the class and said, “Sometimes it’s worthwhile to eyeball the joint.”
I understand what he meant:  Pay attention to your surroundings. I’ve noticed in my own sphere that behind the simplest products frequently resides an enticing income opportunity.

Dividend Grower #1: WDFC

Take WD-40, for example.  Everyone male I know (including myself) owns a can of WD-40. Their distinctive blue-and-yellow cans adorn garages and storage sheds across the county. WD-40  is also the lead product of the WD-40 Company (NASDAQ: WDFC). 
Ubiquity frequently equates to cash flow. So it’s no surprise that WD-40 has paid a dividend every year since 1990. Over the past five years, it has raised that dividend annually.  As the dividend goes, so goes the share price: WD-40 shares have doubled in that time.

Dividend Grower #2: CHD

Baking soda is even more basic and more ubiquitous than spray lubricant. Arm & Hammer baking soda is by far the brand of choice. It’s also the lead brand of Church & Dwight Company (NYSE: CHD), which owns an eclectic portfolio of consumer products. In addition to Arm & Hammer, you’ll find Nair, Orajel, Oxiclean, Trojan Condoms, and First Response home pregnancy test kits.
I’m unsure to how synergies between these brands develop, but they develop. Church & Dwight’s revenue has more than doubled in the past 10 years, while net income has quadrupled.  As for the dividend, its up tenfold in the same period – growing at a spectacular 27% average annual rate.
Church & Dwight shares yield around 1.8%. But with dividends growing at a double-digit annual rate,  in time you can be assured of realizing a much higher yield.

Dividend Grower #3: MKC

If you dig past the Arm & Hammer baking soda in your pantry, you’ll likely come across a spice manufactured by McCormick & Company (NYSE: MKC). The company is not only known for its eponymous McCormick brand, it’s also known for a myriad of other spices and seasonings, most notably Lawry’s.
Because McCormick is a spice company, it’s apropos to note that it “grinds” out 9% to 10% top- and bottom-line growth year after year. It does so by continually introducing new seasonings and by aggressively pushing into new markets, such as Eastern Europe, India, and China.
McCormick also continues to grind out 9%-to-10% annual dividend growth, which it has done for the past 25 years.  McCormick’s dividend yields 2.1%. But with 10% annual dividend growth, 3.1%, 4.1%, etc. dividend yields will come soon enough.

Dividend Grower #4: CLX

Now, should you spill a little McCormick-seasoning on your summer whites, you’ll need a little bleach to remove the stain. One word springs to mind – Clorox. I’m surprised how few investors know that Clorox (NYSE: CLX) is a publicly traded company.  They think it’s a brand buried in one of the consumer-product behemoths.
That’s not the case. Clorox has been an independent company for decades. It’s also been a decades-long dividend grower.  For the past 30 years, Clorox has continually raised its dividend.  For the past 10 years, the dividend has been increased at a 9.5%-annual rate, which is impressive for revenue growth that creaks along at a 3% annual rate.
With Clorox, investors not only get a dependable dividend grower, they get a 3.2% starting yield to boot.
So eyeball the joint, and stay attuned to your surroundings and purchasing habits. You’ll be surprised at the investing opportunities that will appear before your very eyes.

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